Consolidated Financial Report for the First Quarter of the Fiscal Year Ending October 31, 2018 (Japanese GAAP) 1 February 28, 2018 Company name: PARK24 Co., Ltd. Stock listing: TSE Code number: 4666 URL: http://www.park24.co.jp/en/ Representative: Koichi Nishikawa, President Inquiries: Kenichi Sasaki, Director, General Manager of Corporate Planning Division TEL: +81-3-3213-8900 Scheduled day of submission of report: March 15, 2018 Scheduled day of commencing dividend payment: Preparation of Supplementary Financial Data for Quarterly Financial Results Yes / None Information meeting for quarterly financial results to be held Yes / None (Figures are rounded down to the nearest one million yen) 1. Overview of the First Quarter of Fiscal Year Ending October 31, 2018(November 1, 2017 January 31, 2018) (1) Operating results for the three months period ended January 31 (Figures in percentages denote the year-on-year change) Net sales Operating profit Recurring profit Profit attributable to owners of parent Millions of yen % Millions of yen % Millions of yen % Millions of yen % 2018 72,547 43.9 5,028 17.9 4,976 14.3 3,234 12.6 2017 50,404 7.7 4,263-13.5 4,353-10.6 2,872-10.2 (Note) Comprehensive income: Term ended January 31, 2018: 4,775 million yen (57.3%) Term ended January 31, 2017: 3,034 million yen (-2.8%) Net income per share Yen Net income per share after dilution 2018 22.04 20.89 2017 19.61 18.57 (2) Financial position Total assets Net assets Equity ratio Millions of yen Millions of yen % Q1 of Fiscal 2018 256,643 73,218 28.3 Fiscal 2017 256,341 78,804 30.5 (Reference) shareholders equity: Term ended January 31, 2018: 72,516 million yen Fiscal 2017: 78,113 million yen 2. Dividend status Yen Dividend per share End of Q1 End of Q2 End of Q3 End of term Annual Yen Yen Yen Yen Yen Fiscal 2017-0.00-70.00 70.00 Fiscal 2018 - Fiscal 2018 (projection) 0.00-70.00 70.00 (Note) Revisions to dividend projection published most recently: None 3. Projections of consolidated business results for the term ending October 31, 2018 (from November 1, 2017 to October 31, 2018) (The full-year percentages indicate the rates of increase or decrease compared with the previous year, the percentages for the first half are comparisons with the same period of the previous year.) Net sales Operating profit Recurring profit Profit attributable to owners of parent Net income per share Millions of yen % Millions of yen % Millions of yen % Millions of yen % Yen Interim 139,000 29.4 9,100 6.3 8,800 3.1 5,500-1.9 37.19 Full year 290,000 24.5 22,500 9.7 22,500 10.9 14,000 4.2 94.28 (Note) Revisions to consolidated results projection published most recently: None
*Notes (1) Changes in important subsidiaries during the term: No Changes in specified subsidiaries that lead to a change in the scope of consolidation during the term under review New: -- company ( - ) Eliminated: -- company ( - ) (2) Adoption of simplified accounting methods and: : special accounting treatment: No (Note) Adoption of simplified accounting methods or accounting methods unique to the preparation of quarterly consolidated financial statements (3) Changes in accounting principles and procedures and the method of presentation 1) Changes associated with the revision of accounting principles, etc.: No 2) Change other than 1): No 3) Changes in accounting estimates: No 4) Restatement: No (Note) For details, please refer to Changes in accounting policies and changes or restatement of accounting estimates on p.4 of accompanying materials. (4) Number of shares issued (common stock) 1) Number of shares issued at the First quarter ended end of the term (including treasury January 2018: stock) 2) Number of treasury stock at the First quarter ended end of the term January 2018: 3) Average number of shares during the term (consolidated cumulative period) First quarter ended January 2018: 146,764,635 shares 1,245 shares 146,725,116 shares Fiscal year ended October 2017: Fiscal year ended October 2017 First quarter ended January 2017: 146,722,835 shares 1,185 shares 146,477,251 shares (* Status of a quarterly review) This financial summary does not need to undergo a quarterly review under the Financial Instruments and Exchange Act. The quarterly consolidated financial statements have been under review at the time of the announcement of this financial summary. (* Statement regarding the proper use of financial forecasts and other special remarks) Forward-looking statements such as the forecasts for operating results contained in this material are based on currently available information that the Company has obtained and certain assumptions that the Company deems reasonable, and therefore, actual results may differ materially from the forecasts due to various factors. For assumptions used for the forecasts and cautions for the use of forecasts, please refer to 1. Qualitative Information on Results for the First Quarter, (4) Information on the future outlook, including consolidated business performance forecasts on page 5 of accompanying materials. 2
Accompanying Materials Contents 1. Qualitative Information on Results for the First Quarter (1) The consolidated Operating results... 4 (2) The consolidated financial position... 5 (3) The consolidated cash flow condition... 5 (4) Information on the future outlook, including consolidated business performance forecasts... 5 2. Quarterly Consolidated Financial Statements (1) Quarterly consolidated balance sheets... 6 (2) Quarterly consolidated statements of profit and loss and comprehensive income... 8 (Consolidated profit and loss statement)... 8 (Consolidated statement of comprehensive income)... 9 (3) Quarterly consolidated statements of cash flow... 10 (4) Notes to Quarterly Consolidated Financial Statements Note on going concern assumptions... 11 Segment information... 11 Note when there is a considerable change in the amount of shareholders equity... 12 3
1. Qualitative Information on Results for the First Quarter (1) The consolidated Operating results During the first quarter of the consolidated fiscal year ending October 31, 2018 (November 1, 2017 to January 31, 2018,) the Japanese economy continued on a gradual recovery trajectory due to improvements in corporate incomes and a recovery in personal consumption. However, the future of the economy remains uncertain amid uncertainty about the global economy, reflecting policy trends and geopolitical risks overseas. In this environment, the Group has sought to achieve a comfortable automobile society by aiming to expand existing services and create new services. And, the Group has focused on building a business foundation of overseas parking operators who joined the Group last year. Although our group businesses were deteriorated by record snowfall in January, as a result, in the first quarter under review the Group posted net sales of 72,547 million yen (up 43.9% year on year), operating profit of 5,028 million yen (up 17.9% year on year) and recurring profit of 4,976 million yen (up 14.3%), and profit attributable to owners of parent stood at 3,234 million yen (up 12.6%). Results by business segment are as follows: <Parking Business> The Group has strived to develop new parking through comprehensive community-based sales activities, realize early profitability of it, develop parking by providing consulting services to major companies and also expand its business foundations such as B-Times, a parking site matching and reservation service. On the other hand, the Group has been seeking to enhance customer convenience. As part of business to help stores around Times parking draw customers, the Group has started the new services such as Times Pay, a payment service that was launched on a full-scale basis last year, responding to diversified means of payments including electric money. As a result, the numbers of Times parking facilities and parking spaces managed at the end of the term under review were 17,129, up 1.7% from the end of the previous fiscal year, and 565,830, up 2.6%, respectively. The total number of parking sites managed, including monthly parking and facility management services, rose 1.6% from the end of the previous fiscal year, to 18,550, and the total number of parking spaces managed increased 2.6%, to 701,387. Net sales in this segment (including intersegment sales) stood at 38,246 million yen (rising 6.3% year on year), and operating profit amounted to 6,415 million yen (up 3.0%). <Parking Business Overseas> Last year, overseas parking business operators in five countries, namely Australia, New Zealand, the U.K., Singapore, and Malaysia, were added to the Group. Going forward, the Group aims to reinforce the business bases of the operators and roll out parking services that customers can use in a safe, secure and convenient manner, as in Japan. The Group is also determined to combine the parking service network in individual countries with knowhow and management ability accumulated in Japan. As a result, the numbers of overseas parking sites and parking spaces managed at the end of the fiscal year under review were 2,277, up 3.2% from the end of the previous fiscal year, and 567,117,up 3.6% respectively, and the total numbers of parking sites and parking spaces managed worldwide were 20,827, up 1.8% and 1,268,504, up 3.0% respectively. Sales in this segment (including intersegment sales) stood at 16,788 million yen (increasing 2,600.7% year on year), and operating profit was 507 million yen (up 978.8%). <Mobility Business> By opening stores in locations that are easy for customers to access and providing car models suited to their needs, and enhancing the commitment to the expansion of Pitto Go Delivery, the Group has been developing an environment where users can feel greater affinity with the Group s rent-a-car service. With regard to the car sharing service, the Group continued from the previous consolidated fiscal year to aggressively develop stations and sought to expand services for corporate clients. In addition, the Group has committed itself to creating an environment where people can move without stress, through installations of vehicles in tourist spots and participation in social experiments in individual locales. As a result, the number of stations at the end of the fiscal year under review was 10,257 and the number of vehicles distributed was 20,454 units (up 1.9% and 2.1% respectively in comparison to the end of the previous fiscal year), and the number of car sharing members also increased 4.0% from the end of the previous fiscal year, to 939,877. As a result, the total number of vehicles in the Mobility Business segment at the end of the fiscal year under 4
review fell 0.4% from the end of the previous fiscal year, to 48,787. Net sales in the segment (including intersegment sales) reached 17,569 million yen (increasing 26.9% year on year). On the other hand, operating income was 516 million yen (increasing 1.2% year on year). (2) The consolidated financial position Total assets at the end of the fiscal year under review rose 301 million yen from the end of the previous fiscal year, to 256,643 million yen. The main changes in assets were increases of cash and deposits of 2,728 million yen, other current assets including accounts receivable-other of 1,554 million yen, goodwill of 543 million yen and decreases of notes and accounts receivable of 924 million yen and property, plant and equipment including machinery, equipment and vehicles (net value) of 3,574 million yen. Total liabilities increased 5,888 million yen, to 183,425 million yen. Main changes in liabilities were increases of short and long-term loans payable of 9,767 million yen, other current liabilities including deposits of 487 million yen, and decreases of income taxes payable by 3,245 million yen, provision for bonuses of 740 million yen. Net assets fell 5,586 million yen, to 73,218 million yen, as a result of increases of 3,234 million yen in retained earnings due to the posting of a profit attributable to owners of parent and 1,388 million yen in foreign currency translation adjustments, and a decrease of 10,270 million yen due to dividend payments out of retained earnings. (3) The consolidated cash flow condition The balance of cash and cash equivalents at the end of the fiscal year under review increased 2,779 million yen from the end of the previous consolidated fiscal year, to 20,554 million yen. The cash-flow situation by category for the fiscal year was as follows: (Net cash from operating activities) Net cash provided by operating activities increased 4,856 million yen year on year, to 11,870 million yen. This primarily reflected the total of depreciation and amortization and income before income taxes and minority interests of 11,732 million yen and income taxes paid of 4,142 million yen. (Net cash from investing activities) Net cash used in investing activities was 7,235 million yen (cash outflows decreased 13,698 million yen year on year). This figure primarily reflects purchases of property, plant, and equipment of 6,162 million yen associated with the opening of Times parking facilities and the acquisition of vehicles for service, and long-term prepaid expenses of 915 million yen. (Net cash from financing activities) Net cash used in financing activities was 1,882 million yen (up 15,353 million yen year on year). This was chiefly attributable to dividend payments of 10,272 million yen and the repayment of long term loans payable of 1,229 million yen and 1,163 million yen repayment for lease obligations which offset a net increase of 10,803 million yen in short-term loans payable. (4) Information on the future outlook, including consolidated business performance forecasts The consolidated earnings forecasts for the fiscal year ending October 31, 2018 have not been changed from the figures announced on December 14, 2017 in the Consolidated Financial Report for the Fiscal Year Ended October 31, 2017. 5
2. Quarterly Consolidated Financial Statements (1) Quarterly consolidated balance sheets (Unit: million yen) As of October 31, 2017 Fiscal 2017 Summary As of January 31, 2018 Q1 of Fiscal 2018 Assets Current assets: Cash and deposits 18,152 20,880 Notes and accounts receivable-trade 15,250 14,326 Inventories 1,468 1,483 Other 24,434 25,988 Allowance for doubtful accounts (207) (223) Total current assets 59,097 62,455 Noncurrent assets: Property, plant and equipment: Buildings and structures, net 15,491 15,696 Machinery, equipment and vehicles, net 43,747 40,205 Land 24,454 24,516 Lease assets, net 18,576 18,544 Other, net 13,271 13,004 Total property, plant and equipment 115,541 111,967 Intangible assets: Goodwill 59,750 60,294 Other 2,770 2,787 Total intangible assets 62,521 63,081 Investments and other assets Net defined benefit asset 700 714 Other 18,480 18,424 Total Investments and other assets 19,181 19,139 Total noncurrent assets 197,244 194,187 Total assets 256,341 256,643 Liabilities Current liabilities: Notes and accounts payable-trade 713 711 Current portion of convertible bonds 19,970 19,970 Short-term loans payable 43,767 54,646 Income taxes payable 4,974 1,728 Provision for bonuses 1,752 1,011 Provision 327 510 Other 42,537 43,025 Total current liabilities 114,043 121,604 Noncurrent liabilities: Long-term loans payable 40,699 39,588 Net defined benefit liabilities 155 165 Provision Asset retirement obligations 6,202 6,253 Other 16,435 15,813 Total noncurrent liabilities 63,493 61,820 Total liabilities 177,536 183,425 6
As of October 31, 2017 Fiscal 2017 Summary As of January 31, 2018 Q1 of Fiscal 2018 Net Assets Shareholders equity: Capital stock 9,549 9,580 Capital surplus 11,302 11,333 Retained earnings 57,898 50,862 Treasury stock (1) (2) Total shareholders equity 78,748 71,774 Other accumulated comprehensive income: Valuation difference on available-for-sale securities 141 134 Deferred gains or losses on hedges (76) (71) Revaluation reserve for land (1,052) (1,052) Foreign currency translation adjustments 674 2,062 Remeasurements of defined benefit plans (324) (331) Total other accumulated comprehensive income (635) 741 Subscription rights to shares 299 288 Minority interests 392 413 Total net assets 78,804 73,218 Total liabilities and net assets 256,341 256,643 7
(2) Quarterly consolidated statements of profit and loss and comprehensive income (Consolidated profit and loss statement) (First quarter of Fiscal 2018) From November 1, 2016 to January 31, 2017 Q1 of Fiscal 2017 (Unit: million yen) From November 1, 2017 to January 31, 2018 Q1 of Fiscal 2018 Net sales: 50,404 72,547 Cost of sales 37,503 55,894 Gross profit 12,901 16,652 Selling, general and administrative expenses 8,637 11,624 Operating income 4,263 5,028 Non-operating income: Interest income 0 0 Dividend income 2 2 Void ticket 43 48 Foreign exchange gains 124 4 Other 19 135 Total non-operating income 190 191 Non-operating expenses: Interest expenses 16 164 Share of loss of entities accounted for using equity method Expense incurred for evacuation of parking facilities 13 2 57 36 Other 13 40 Total non-operating expenses 100 243 Recurring income 4,353 4,976 Income before income taxes and minority interests 4,353 4,976 Income taxes-current 1,170 1,396 Income taxes-deferred 310 188 Total income taxes 1,481 1,584 Net income 2,872 3,391 Profit attributable to non-controlling interests - 157 Profit attributable to owners of parent 2,872 3,234 8
(Consolidated statement of comprehensive income) (First quarter of Fiscal 2018) From November 1, 2016 to January 31, 2017 Q1 of Fiscal 2017 (Unit: million yen) From November 1, 2017 to January 31, 2018 Q1 of Fiscal 2018 Income before minority interests 2,872 3,391 Other comprehensive income Valuation difference on available-for-sale securities 26 (7) Deferred gains or losses on hedges - 4 Foreign currency translation adjustments 50 1,386 Remeasurements of defined benefit plans 27 (7) Share of other comprehensive income of associates accounted for using equity method 58 7 Total other comprehensive income 162 1,383 Comprehensive income 3,034 4,775 (Breakdown) Comprehensive income attributable to owners of the parent Comprehensive income attributable to noncontrolling interests 3,034 4,611-163 9
(3) Quarterly consolidated statements of cash flow Net cash provided by (used in) operating activities: From November 1, 2016 to January 31, 2017 Q1 of Fiscal 2017 (Unit: million yen) From November 1, 2017 to January 31, 2018 Q1 of Fiscal 2018 Income before income taxes and minority interests 4,353 4,976 Depreciation and amortization 5,612 6,756 Interest and dividends income (3) (3) Interest expenses 16 164 Decrease (increase) in notes and accounts receivabletrade (241) 1,120 Decrease (increase) in inventory 1,191 3,140 Increase (decrease) in notes and accounts payabletrade 69 (54) Decrease (increase) in accounts receivable-other 196 233 Decrease (increase) in prepaid expenses 560 900 Increase (decrease) in accounts payable-other 75 1,444 Increase (decrease) in notes payable-facilities 113 (90) Others, net (434) (2,438) Subtotal 11,509 16,149 Interest and dividends income received 3 3 Interest expenses paid (14) (139) Income taxes paid (4,484) (4,142) Net cash provided by (used in) operating activities 7,013 11,870 Net cash provided by (used in) investment activities: Purchase of property, plant and equipment (4,495) (6,162) Proceeds from sales of property, plant and equipment 0 8 Purchase of intangible assets (243) (242) Purchase of investments in subsidiaries resulting in change in scope of consolidation (15,276) - Purchase of long-term prepaid expenses (791) (915) Others, net (127) 76 Net cash provided by (used in) investment activities (20,933) (7,235) Net cash provided by (used in) financing activities: Net increase (decrease) in short-term loans payable 25,000 10,803 Proceeds from long-term loans - 63 Repayment of long-term loans payable (1,250) (1,229) Repayments of lease obligations (960) (1,163) Proceeds from issuance of common stock 206 50 Purchase of treasury stock - (0) Cash dividends paid (9,524) (10,272) Cash dividends paid to non-controlling shareholders - (135) Net cash provided by (used in) financing activities 13,471 (1,882) Effect of exchange rate change on cash and cash equivalents 34 26 Net increase (decrease) in cash and cash equivalents (414) 2,779 Cash and cash equivalents at beginning of period 19,461 17,775 Cash and cash equivalents at end of period 19,046 20,554 10
(4) Notes to Quarterly Consolidated Financial Statements [Note on going concern assumptions] Not applicable. [Segment information] I. First quarter of fiscal 2017 (from November 1, 2016 to January 31, 2017) Information on sales and profits or losses by reported segment Sales Parking Business In Japan Reported segments Parking Business Overseas Mobility Business Total (Unit: million yen) Amount on consolidated Adjustment profit and (Note) 1 loss statement (Note) 2 Sales to external customers 35,945 621 13,837 50,404-50,404 Internal sales or amount of transfer between segments 29-13 42 (42) - Total 35,975 621 13,850 50,447 (42) 50,404 Segment profit (loss) 6,229 47 509 6,786 (2,523) 4,263 (Note) 1 An adjustment of minus 2,523 million yen in segment profit (loss) includes an amortization of goodwill of minus 38 million yen, and Company-wide expenses of minus 2,484 million yen. Company-wide expenses are mainly expenses that do not belong to either of the reported segments. Those expenses are relating to the administration division, including the general affairs department. 2 Segment profit (loss) is adjusted in accordance with operating income in the consolidated profit and loss statement. Sales II. First quarter of fiscal 2018 (from November 1, 2017 to January 31, 2018) 1.Information on sales and profits or losses by reported segment Parking Business In Japan Reported segments Parking Business Overseas Mobility Business Total (Unit: million yen) Amount on consolidated Adjustment profit and (Note) 1 loss statement (Note) 2 Sales to external customers 38,211 16,788 17,547 72,547-72,547 Internal sales or amount of transfer between segments 35-22 57 (57) - Total 38,246 16,788 17,569 72,605 (57) 72,547 Segment profit (loss) 6,415 507 516 7,438 (2,410) 5,028 (Note) 1. An adjustment of minus 2,410 million yen in segment profit (loss) includes an amortization of goodwill of minus 38 million yen, and Company-wide expenses of minus 2,372 million yen. Company-wide expenses are mainly expenses that do not belong to either of the reported segments. Those expenses are relating to the administration division, including the general affairs department. 2. The segment profit of 507 million yen in Parking Business Overseas includes an amortization of goodwill of minus 752 million yen. Amortized goodwill includes a tentatively calculated amount related to the business combination conducted in the previous consolidated fiscal year under review 3. Segment profit (loss) is adjusted in accordance with operating profit in the consolidated profit and loss 11
statement. [Note when there is a considerable change in the amount of shareholders equity.] Not applicable. 12